He is among five Liberal Democrats appointed to Cabinet posts, something Mr Cameron said showed "the strength and depth of the coalition and our sincere determination to work together constructively".

The coalition is the first time the Conservatives and Liberal Democrats have had a power-sharing deal at Westminster and the first coalition in the UK since the Second World War.

Mr Cameron's arrival in Downing Street marks the end of 13 years of Labour rule. The Conservative leader, who is six months younger than Tony Blair was when he won power in 1997, is the youngest prime minister since 1812 and the first Old Etonian to hold the office since the early 1960s.

The Conservatives won the most seats in last week's general election, but not enough to secure an overall Commons majority, resulting in a hung Parliament.

After days of talks with the Lib Dems - the UK's third biggest party - a deal was reached on Tuesday that resulted in Labour Prime Minister Gordon Brown resigning.

In a joint press conference in the Downing Street garden, Mr Cameron said the coalition government could mark a "historic and seismic shift" in British politics.

He said they had discussed having a minority Conservative government, supported by the Lib Dems on key votes but had concluded that was "uninspiring".